PREMIUM SERVICE

TBY talks to Ebrahim Obaid Al Zaabi, Director General of the Insurance Authority, on the history of the institution, new technology, and outlooks for the future.

What is the history of the Insurance Authority and what is its role today?

We recently celebrated the 10th anniversary of the authority. Prior to that, the authority was part of the Ministry of Economy. Then, the law that established the authority came in 2007, and we began practicing according to the regulations stipulated in the bylaws. We have introduced many technical insurance regulations for companies, including takaful, for the first time. To help companies adapt their business models, we engage their leaders in designing most of our regulations through consultations before we introduce new laws or make amendments. We cannot force legislation into place. Today, the authority is growing rapidly, hand in hand with the sector. We are number one in terms of premium collection in the MENA region, witnessing an average growth of 10% per year. Demand is high and penetration in every sector of insurance is growing as well.

What has been the reaction to the new motor insurance policy?

In 2017, we rolled out a new motor insurance policy. Before, we had a regulation in place since 1987 that had not been amended. For five years, we have been reviewing the policy, asking companies how we could improve it to tackle outstanding issues. At the end of the day, our regulations are for consumers and we needed input to add value to these policies. This five-year journey has come to an end, and we finally rolled out our new policy, though our work is not yet finished. In the meantime, we encourage people to shop around at the 48 insurance companies in the UAE until they find a policy that is right for them.

How is the Insurance Authority working on introducing technology to streamline the claims handling process and data acquisition?

We look at technology, fintech, and blockchain, which are all in our pipeline. Although in our culture it can take time to instill change, currently we are trying to get things done electronically. The new claims technology that we have introduced pushes claims directly to the insurance company, and it has three days to come back to the client before it gets escalated to us. We aim to reduce the amount of time it takes to receive a claim as much as possible. That is why we introduced a loaner car policy, whereby the company has to provide customers with the same type of car or compensate them AED300 (USD82) per day until the claim is settled. Our neighbors may have larger populations than Abu Dhabi; however, we are beating them in terms of technology.

What is the competitive advantage of the UAE market compared to other countries in this region?

Awareness in our market is higher; we see many investors who think of insurance before they even open a new business. We also have a large amount of compulsory insurance, such as health and motor, which adds value as well. Now, we have been approached by different entities that want other compulsory insurance. We want to get the government involved as much as possible. Insurance will become increasingly dominant in the coming years, as people think even more about how they can insure themselves and companies work to create better products. Typically, the stock exchange is the mirror of the economy anywhere in the world. However, insurance is heading in that direction. Now, we also have to pay VAT, and there will be an impact during the first year, after which everything will run smoothly. We want to reduce the number of complaints from 60 a day to zero—that is the ultimate goal.

What are your goals in terms of takaful and how will you achieve them?

We need to be number one in the takaful market. We have to examine the entire ecosystem and identify where the “clutch" is. If we can have profitable companies and make them the base contributors, we will experience more growth in takaful. They will then be more credible and more people will start joining. The takaful concept is simple; if one does not make any claims by the end of the year, the insurance company has to pay them back. If we can see how to get companies profitable and more credible on this model and they can return insured entities money back at a percentage, we will see more people getting involved. In the UAE, the investment side for takaful is limited. Trading on the stock exchange is one source, as is sukuk and real estate. One has to search for other opportunities to invest in to expand their range. The national sukuk market is healthy, though the bonds market has not been as liquid. The problem is also getting out of the investment, which is where people lose money.

What are your expectations for 2018?

Life insurance is the next big thing, as well as making investments. We are working actively to promote life insurance and want to raise awareness. We have drafted new regulations that we are working on and they will come out on the takaful side as well. It will wrap up many loose ends and fix things that are not being done correctly.